Friedman "spent 28 years with the investment bank Goldman Sachs & Company, where he served as co-chairman from 1990 to 1992, and chairman and senior partner from 1992 to 1994." At the time of his nomination, Friedman was "a senior principal at the investing firm Marsh & McLennan Capital."[3]

"The position of NEC chairman was created to make room at the table for Robert E. Rubin, who had previously been co-director of Goldman Sachs along with Bush's new choice, Stephen Friedman.[6] Their successor was Jon S. Corzine, now a Democratic senator from New Jersey.

"Many conservatives worry about Friedman's largely honorary position with the Concord Coalition, an organization more fascinated with estimated future budget deficits than with current economic reality."[5]

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Allegations of insider trading

Friedman was on the Board of Goldman Sachs at the same time as he served as Chairman of the Federal Reserve Bank of New York. He resigned from the NY Federal Reserve, keeping his position with Goldman Sachs, after it was revealed that he had purchased another $3 million worth of Goldman Sachs stock while the Federal Reserve was regulating the company[2] after it became a bank holding company in September 2008. Around this time Goldman received payments from AIG that had been negotiated by the NY Fed to be paid at 100 cents on the dollar, even though AIG was in default.

The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article.